3.12 Provisions, Contingent Liabilities & Contingent Assets
a. ) Provision
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognized as a finance cost.
Provisions are not discounted to their present value and are determined based on the best estimate required to settle the
obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates.
b. ) Contingent Liabilities :
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability
also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.
The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.
c. ) Contingent Assets :
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only be occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the Company. The Company does not
recognize contingent asset.
3.13 Foreign Currency Transactions & Translations
a. ) Initial recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency amount the exchange
rate between the functional currency and the foreign currency at the date of the transaction.
b. ) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items,
which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the
date of the transaction.
c. ) Exchange difference
The Company accounts for exchange differences arising on translation / settlement of foreign currency monetary items as below:
i. Exchange differences arising from translation of long term foreign currency monetary items:
Long-term foreign currency monetary items recognized in the financial statements as on March 31, 2016 related to acquisition
of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.
Long-term foreign currency monetary items recognized in the financial statements after March 31, 2016 related to acquisition
of a fixed asset are charged to the Profit and Loss statement.
Other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation
Difference Account" and amortized over the remaining life of the concerned monetary item.
ii. Exchange differences on other monetary items:
All other exchange differences are recognized as income or as expenses in the year in which they arise.
3.14 Cash & Cash Equivalent
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank (including demand deposits) and in
hand and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
3.15 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders
and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares.
3.16 Lease
The Company's lease asset classes primarily consist of leases for Plant & Machinery. The Company assesses whether a contract
is or contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii)
the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease
liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term
leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease
payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are
depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the
underlying asset. The lease liability is initially measured at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing
the carrying amount to reflect the lease payments made. A lease liability is remeasured upon the occurrence of certain events
such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement
normally also adjusts the leased assets. Lease liability and ROU asset have been separately presented in the Balance Sheet.
3.17 Segment Reporting
An operating segment is component of the Company that engages in the business activity from which the Company earns
revenues and incurs expenses, for which discrete financial information is available and whose operating results are regularly
reviewed by the chief operating decision maker, in deciding about resources to be allocated to the segment and assess its
performance. The Company's chief operating decision maker is the Chief Executive Officer and Managing Director.
3.18 Investment Property
Investment Property is measured initially at cost including related transaction costs. Such cost comprises the purchase price,
borrowing cost if capitalization criteria are met. Subsequent to initial recognition, investment properties are stated at cost less
accumulated depreciation and accumulated impairment loss, if any. All day-to-day repair and maintenance expenditure are
charged to the Standalone Statement of profit and loss for the period during which such expenses are incurred.
An Investment property is derecognized either when it has been disposed of or when it has been permanently withdrawn from
use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the
carrying amount of the asset is recognised in profit or loss in the period of derecognition.
Transfers are made to (or from) investment property only when there is a change in use.
3.19 Non-Current Assets Held for Sale
The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale
rather than through continuing use.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset is available for
immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant
changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the sale and
the sale expected within one year from the date of classification.
Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
Costs to sell are the incremental costs directly attributable to the disposal of an asset excluding finance costs and income tax
expense.
Assets and liabilities classified as held for sale are presented separately from other items in the balance sheet.
3.20 Significant Accounting judgements, estimates & estimates
The preparation of the Company's Standalone Financial statements requires management to make estimates, judgments and
assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the accompanying disclosure, and
the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require
a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described below. The Company based its assumptions and estimates on parameters available when the Standalone Financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.
Impairment of Investments
The Company reviews its carrying value of its investments carried at cost annually, or more frequently when there is indication
for impairments. If the recoverable amount is less than it carrying amount, the impairment loss is accounted for.
Taxes
Deferred tax assets are recognized for unused tax credits to the extent that it is probable that taxable profit will be available
against which the credits can be utilized. Significant management judgment is required to determine the amount of deferred
tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax
planning strategies.
Revenue from contract with customer
The Company use the input method for recognize construction revenue. Use of the input method require the Company to
estimate the efforts or costs expended to the date as a proportion of the total efforts or costs to be expended. Efforts or costs
expended have been used to measure progress towards completion of performance obligation as there is a direct relationship
between input and productivity. Provision for estimated losses, if any, on uncompleted performance obligation are recorded
in the period in which such losses become probable based on the expected contract estimates at the reporting date. Due to
technical complexities involved in the budgeting process, contract estimates are highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to
these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required
in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of financial instruments.
3.21 Recent Accounting Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has not notified any new
standards or amendments to the existing standards applicable to the Company.
Following are the risk to which the plan exposes the entity :
A Actuarial Risk:
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:
Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase
in Obligation at a rate that is higher than expected.
Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption then the Gratuity
benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash
flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.
Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption then the
Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at
the resignation date.
B Investment Risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair
value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount
rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount
rate during the inter-valuation period.
C Liquidity Risk:
Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some
of such employees resign / retire from the company there can be strain on the cash flows.
D Market Risk:
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial
assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in
discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on
the yields on the corporate / government bonds and hence the valuation of liability is exposed to fluctuations in the yields as
at the valuation date.
E Legislative Risk:
Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation /
regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the
employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized
immediately in the year when any such amendment is effective.
Limitation of method used for sensitivity analysis :
Sensitivity analysis produces the results by varying a single parameter & keeping all the other parameters unchanged. Sensitivity
analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more
variables are changed. There are no changes from the previous period in the methods and assumptions used in preparing the
sensitivity analysis.
34.12 Details of Asset- Liability Matching Strategy
There are no minimum funding requirements for a Gratuity benefits plan in India and there is no compulsion on the part of the
Company to fully or partially pre-fund the liabilities under the Plan. The trustees of the plan have outsourced the investment
management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate
provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance
regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly
follow an asset-liability matching strategy to manage risk actively in a conventional fund.
37.3 Performance obligation
Information about the company's performance obligations are summarised below:
(a) Construction services
The performance obligation is satisfied over time as the assets is under control of customer and they simultaneously receives
and consumes the benefits provided by the Company. The Company receives progressive payment towards provision of
construction services.
(b) The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March
are, as follows:
The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31,2025 is Rs. 5275.53
lakhs (P.Y. Rs. 79842.46 lakhs) . Out of this the Company expect to recognise revenue around Rs. 5275.53 lakhs (P.Y. Rs. 79842.46
lakhs) in next year. Remaining performance obligation estimates are subject to change and affected by several factors including
terminations , change of scope of contracts, occurrence of same is expected to be remote.
37.4 Reconciliation of the amount of revenue recorded in Standalone statement of Profit and loss is not required as there are no
adjustments to the contract price.
41. Financial Risk Management
41.1 Financial Instruments Risk management objectives and Policies
The Company's principal financial liabilities comprise borrowings and trade & other payables. The main purpose of these
financial liabilities is to finance the Company's operations and to support its operations. The Company's principal financial assets
include Investments, trade & other receivables and cash and bank balance that derive directly from its operations.
The Company's activities expose it to market risk, credit risk and liquidity risk. In order to minimize any adverse effects on the
financial performance of the company, derivative financial instruments, such as foreign currency option contracts are entered to
hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives
are used exclusively for hedging purposes and not as trading / speculative instruments.
The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management
framework. Risk management systems are reviewed periodically to reflect changes in market conditions and the Company's
activities. The Board of Directors oversee compliance with the Company's risk management policies and procedures, and
reviews the risk management framework.
41.2 Market Risk
The market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Financial instruments
affected by market risk include borrowings, Investments, other receivables, trade and other payables and derivative financial
instruments.
Within the various methodologies to analyse and manage risk, Company has implemented a system based on "sensitivity
analysis" on symmetric basis. This tool enables the risk managers to identify the risk position of the entities. Sensitivity analysis
provides an approximate quantification of the exposure in the event that certain specified parameters were to be met under a
specific set of assumptions. The risk estimates provided here assume:
- a parallel shift of 100-basis points of the interest rate yield curves in all currencies. The analyses exclude the impact of
movements in market variables on: the carrying values of gratuity and provisions.
- a simultaneous, parallel foreign exchange rates shift in which the INR appreciates / depreciates against all currencies by 2%
The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market conditions
and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of profit
& loss may differ materially from these estimates due to actual developments in the global financial markets.
The following assumption has been made in calculating the sensitivity analyses:
- The sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes in respective market risks.
This is based on the financial assets and financial liabilities held at March 31, 2025 and March 31, 2024.
41.2.1 Interest Rate Risk
Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in market rates of interest. The Company
seeks to mitigate such risk by entering into interest rate derivative financial instruments such as interest rate swaps. Interest rate
swap agreements are used to adjust the proportion of total debt, that are subject to variable and fixed interest rates.
Under an interest rate swap agreement, the Company either agrees to pay an amount equal to a specified fixed-rate of interest
times a notional principal amount, and to receive in return an amount equal to a specified variable-rate of interest times the
same notional principal amount or, vice-versa, to receive a fixed-rate amount and to pay a variable-rate amount. The notional
amounts of the contracts are not exchanged. No other cash payments are made unless the agreement is terminated prior to
maturity, in which case the amount paid or received in settlement is established by agreement at the time of termination, and
usually represents the net present value, at current rates of interest, of the remaining obligations to exchange payments under
the terms of the contract.
41.3 Liquidity Risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without
incurring unacceptable losses. The Company's objective is to, at all times maintain optimum levels of liquidity to meet its cash
and collateral requirements. The Company closely monitors its liquidity position and deploys cash management system. It
maintains adequate sources of financing including debt at an optimized cost.
The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted
payments:
41.4 Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge
an obligation.
Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness.
Credit risk arises primarily from financial assets such as trade and other receivables, Loans and advances, cash and cash
equivalent and other balances with banks.
Credit risk on cash and cash equivalents is limited as company deposits with the banks.
The company generally gives loans and advances to its subsidiaries and employees. Hence, the management believes that the
company is not exposed to any credit risk in respect of such loans and advances.
In respect of trade receivables, credit risk is being managed by the company through credit approvals, establishing credit limits
and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course
of business. All trade receivables are also reviewed and assessed for default on a regular basis. The Company has reviewed
expected credit loss provision (ECL) on its trade receivables as per Ind AS provisions.
The maximum exposure to the credit risk at the reporting date is primarily from trade recievables as on March 31, 2025
Rs. 32117.02 Lakhs (as on March 31, 2024 Rs. 41080.71 Lakhs).
41.5 The Company's listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future
values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on
individual and total equity instruments. Reports on the equity portfolio are submitted to the Company's senior management on
a regular basis. The Company's Board of Directors review and approve all equity investment decisions.
At the reporting date, the exposure to:
unlisted equity in subsidiaries at cost of Rs. 2,403.16 Lakhs (P.Y. Rs. 2,403.16 Lakhs ).
listed equity in subsidiaries at cost of Rs. 49,255.72 Lakhs (P.Y. Rs. 49,255.72 Lakhs)
Sensitivity analysis
As at 31 March 2025, the exposure to listed equity securities at fair value was Rs. 10369.44 Lakhs (P.Y. Rs 16954.77 Lakhs).
Changes in this exposure would not have a material effect on the profit or loss and total equity of the Company.
42. Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other
reserves attributable to the equity holders of the Company.
The Company's objective for capital management is to maximize shareholder value and safeguard business continuity.
The Company determines the capital requirement based on annual operating plans and other strategic plans. The funding
requirements are met through equity and operating cash flows generated.
Summary of Quantitative Data is given here under:
47. The Company has outstanding loan, Trade and other receivable aggregating to of Rs. 20776.80 lakhs given to Rohtak Panipat
Tollway Private Limited (RPTPL), a step-down subsidiary company which is engaged in construction, operation and maintenance
of road projects under concession agreement with National Highways Authorities of India (NHAI). The net worth of RPTPL has
fully eroded. RPTPL has issued the termination notice on July 27, 2021, to NHAI by exercising the criteria of "Event of Defaults"
under the concession agreement.
In this regard the management of RPTPL has lodged total claims aggregating to Rs. 1,93,792 Lakhs relating to termination
payments, O&M cost due to force majeure, Covid claim & demonetization etc. In respect of such claims, RPTPL has given
notice invoking Arbitration vide letter dated March 27, 2023. The Arbitral proceedings for the same are completed and the
Arbitral Award is declared on 23.01.2025 unanimously. Counter Claim of NHAI regarding Premium is rejected completely by Ld.
Arbitrator. As per the said Majority award, the net awarded amount after deducting all dues of NHAI including Premium works
out to Rs. 1,08,054.50 lakhs (principal of Rs. 77,963.10 lakhs and interest of Rs. 30,091.40 lakhs).
In respect of Arbitration Claim for competing road, the award by Majority was passed on May 30, 2023 against the RPTPL. The
RPTPL has filed the application under section 34 of the Arbitration and Conciliation Act, 1996 before the Honourable Delhi High
Court.
Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms
of concession agreement, which is backed by legal opinion and pendency of the matter before Honourable Delhi high Court,
the management has assessed that there is no impairment in the value of loan given to RPTPL and consequently no provision/
adjustment to the carrying value of loan and other receivable as at March 31, 2025 is considered necessary.
The statutory auditors have expressed qualified opinion on financial statements for the year ended March 31, 2025 and qualified
conclusion on financial results for the quarter ended June 30, 2024, September 30, 2024 and December 31, 2024 in respect of
above as regards recoverable value of Company's outstanding loan, Trade and other receivable to RPTPL.
48. The Company has investment in equity shares of Sadbhav Infrastructure Project Limited (SIPL) and loan given to SIPL, the amount
of which is Rs. 79407.54 lakhs as on March 31, 2025. As per the consolidated financial statements of the Sadbhav Infrastructure
Project Limited (SIPL) and its subsidiaries, there is negative net worth of the Group of SIPL and its subsidiaries.
The management has carried out impairment assesment of these assets as on March 31, 2025 considering the projected cash
flow from revenue of operating SPV's, sale of HAM assets and realization of GST claims. Based on the assessment it is concluded
receoverable amounts of these assets are more than the carrying value. Hence no impairment is required to the carrying value
of investment in equity shares and loan to SIPL as on March 31, 2025.
The statutory auditors have expressed qualified opinion on financial statements for the year ended March 31, 2025 and financial
results for the quarter ended June 30, 2024, September 30, 2024 and December 31, 2024 in respect of investment in equity
shares of Sadbhav Infrastructure Project Limited (SIPL) and loan given to SIPL.
49. Some of the vendors have initiated legal proceeding against the Company for recovery of their dues. The Management contends
that in these cases the amount payable in respect of goods and service availed from such vendors is adequately provided in the
books of accounts. However the vendors have claimed additional amount on account of interest etc. which is contested by the
Company and according to the management such claims are not tenable and does not require provision in books of accounts.
Having regard to this the management believes that carrying amount of trade payables is fairly valued.
50. In connection with the Ahmedabad Dholera Project, which was awarded to the Company by the National Highways Authority of
India (NHAI) and divided into two packages, the Company subcontracted a portion of the work to Gawar Constructions Limited
(GCL). The Company and GCL have made significant progress, successfully completed approximately 76% of Package-I and 65%
of Package-II. For the remaining work, the Company requested NHAI's approval to fully subcontract work to GCL.
However, on July 12, 2024, NHAI issued termination notice, invoking all of SEL's bank guarantees without providing the
contractually required cure period or prior notice. Company contends that the termination notice is unjustified, lacks adherence
to basic principles of natural justice. In lieu of this, Both Parties moved this matter to Conciliation Committee of Independent
Experts wherein both parties have now signed settlement Agreement to make good of loss amount due to this action.
51. Contract Assets of Rs. 35019.32 lakhs and other non current financial assets of Rs. 14789.09 outstanding as at March 31,
2025 which represents various claims raised on the Clients based on the terms and conditions implicit in the Engineering,
Procurement & Construction Contracts/Mining Contract in respect of closed / suspended/under construction projects. These
claims are mainly in respect of cost over run arising due to suspension of works, client caused delays, changes in the scope of
work, deviation in design and other factors for which Company is at various stages of negotiation/ discussion with the clients
or under Arbitration/ litigation. On the basis of the contractual tenability, progress of negotiations/ discussions/ arbitration/
litigations/ legal opinions, the Management is of the view that these receivables are recoverable.
The statutory auditors have expressed qualified opinion on financial results for the quarter and year ended March 31, 2025 in
respect of above Contract Assets of Rs. 35019.32 lakhs.
52. The Company is finding difficulties for meeting its payment obligations to suppliers and statutory authorities in the normal
course of business. Additionally, there have been delays and defaults in loan repayments. Due to these financial difficulties, the
consortium of lenders—except for one—signed an Inter Creditor Agreement on December 26, 2022. As a result, the Company's
account has been classified as a Non-Performing Asset (NPA) by most lenders. Furthermore, one lender has filed an application
with the National Company Law Tribunal (NCLT) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate
insolvency proceedings. These factors raise concerns about the Company's ability to continue as a going concern.
In this regard, the management has submitted a Restructuring Plan to the consortium of lenders. The plan includes monetization
of HAM and other assets, infusion of funds by promoters, cash flows from the Gadag Project, receipt of claim amounts from the
settlement of the arbitration award, ongoing arbitration and dispute settlements, collection of receivables, and refinancing or
stake sale of operational projects as well as restructuring the Company's outstanding lender dues.
As part of its business strategy, the management has successfully monetized HAM projects, leading to a significant reduction in
group debt, vendor liabilities, and non-funded exposures of consortium member banks.
In the Ongoing Restructuring Plan, the Company has submitted Techno Economic Viability report to the Consortium of Lenders
which states that Company would be technically and financially viable as per the Proposed Restructuring Plan. Moreover, the
lenders have appointed credit rating agencies, CRISIL and ICRA, which have assigned an RP 4 rating to the Company's debt
restructuring plan which states that Debt facilities/instruments with this symbol are considered to have moderate degree of
safety regarding timely servicing of financial obligations. The resolution plan is at advance stage for consideration by lenders.
Considering the anticipated approval of the resolution plan by lenders, expected realization of receivables, proceeds from
asset monetization, proposed fund infusion by promoter and growth potential in the infrastructure sector, the management is
confident in the Company's ability to resume operations and generate incremental cash flows in foreseeable future
Having regard to above, the management believes there is no threat to the going concern assumption in the preparation of the
financial results for the quarter and year ending March 31, 2025.
53. The Board of Directors at its meeting held on August 14, 2024 approved Employee Stock Option for issuance of equity shares in
one or more tranches, to the eligible employees of the Company and/or its Subsidiary Companies under Sadbhav Engineering
Limited Employee Stock Option -2024 which has been approved by shareholders of the Company in its Meeting held on
September 30, 2024. Company has received In-principle approval from National Stock Exchange of India Limited and BSE Limited
on February 7, 2025 and February 10, 2025 respectively.
56. The Company does not hold any benami property as defined under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
and the rules made thereunder. No proceeding has been initiated or pending against the company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
57. The consortium of lenders of the Company, except one lender, had signed an Inter Creditor Agreement on December 26, 2022,
due to defaults in the repayment of dues, leading to the Company's account being classified as Non-Performing Assets by
majority of lenders. In Connection with the above, the management had submitted Restructuring Plan to the consortium of
lenders, in liew of above, Company has not submitted the Quarterly information system (QIS) statements.
58. As on March 31, 2025 there is no unutilised amounts in respect of any issue of securities and long term borrowings from banks
and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.
59. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 ( Such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961).
60. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
61. The Company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period
except in case of two lenders where charge satisfaction yet to be registered with ROC due to non receipt of no dues certificate.
62. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
63. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
64. During the reporting period, Company had no transactions and no outstanding balances with the company which has been
struck off the register as per the provisions of the Companies Act 2013.
65. The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read
with the Companies ( Restriction on number of Layers) Rules, 2017.
66. The Company is not declared as wilful defaulter by any Bank or Financial Institution or Other lenders.
67. Figures relating to the previous periods/year have been regrouped / rearranged, wherever necessary, to make them comparable
with those of the current periods/year.
68. All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated.
As per our Audit Report of even date For and on behalf of Board of Directors
F0r Manubhai & Shah LLP Shashin V. Patel Jatin Thakkar Hardik Modi
Chartered Accountants Chairman and Managing Director Non Executive Director Company Secretary
Firm Regn. No.: 106041W/W100136 DIN: 00048328 DIN: 09312406 Membership No. F9193
Devansh Gandhi
Partner
Membership No.: 129255
Place: Ahmedabad
Date: May 29, 2025
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